Financial services giant Alexforbes has expressed disappointment with a high court interim ruling that temporarily prevented the payout of former deputy president David “DD” Mabuza’s R44.7-million investment, saying the judgement unfairly saddled the firm with legal costs despite its compliance.
The Johannesburg-based firm was reacting to Acting Judge Johannes Reolofse’s decision on Tuesday in the Mbombela High Court in Mpumalanga. Reolofse sided with Mabuza’s daughter, Tamara Silinda, and her mother, Emunah Silinda, who had sought an urgent order to block Alexforbes from releasing the investment to Nonhlanhla Patience Mnisi, one of Mabuza’s alleged wives.
Alexforbes, in a statement released on Wednesday morning, said it respected the judgement but reserved its right to challenge it.
Unjustified cost order
“While we respect the judgement, Alexforbes is currently reviewing our legal options in response, especially the unjustified cost order against us, considering that Alexforbes had complied fully and timeously with the court’s directions,” said Alexforbes spokesperson Consi Kalamaras.
Last week, the matter brought by Tamara and Emunah was postponed to allow Alexforbes to file an affidavit addressing what the court described as discrepancies in the policy.
Alexforbes had until September 26 to do so, which it did, followed by a replying affidavit from the applicants on September 29.
In its response to the interim order, the firm argued that the court’s reasoning blurred the distinction between pension funds and living annuities.
“On retiring in early 2023, the late Mr DD Mabuza elected not to retain his pension benefit in the Political Office-Bearers Pension Fund. Instead, in terms of the Fund Rules, he chose to transfer the full value of his pension to purchase a living annuity from Alexforbes,” said Kalamaras.
According to the company, a living annuity is legally distinct from a pension fund and falls under insurance law, not the Pensions Fund Act.
“A living annuity is not a retirement fund and is not governed by Section 37C of the Pension Funds Act… In law, the insurer must pay the nominated beneficiaries and there is no discretion to depart from this,” Kalamaras explained.
Bound by law to pay beneficiaries
The company stressed that its role was administrative, and that it was bound by law to pay the nominated beneficiaries on record.
On Tuesday, however, the applicants’ legal defence led by Advocate Doctor Sibuyi of Mthunzi Chambers countered that the source of the living annuity was the pension fund.
Later in the day, Judge Reolofse made it clear he was unconvinced by Alexforbes’ explanation of how Mabuza’s protected pension funds had “morphed” into an investment.
“After having read the affidavit of Alexander Forbes, I’m not entirely convinced about how this money morphed from protected pension funds to no protection. That will have to be explained in Part B of the notice of motion,” Reolofse said.
The judge ruled that while Tamara’s claim under Section 37C was doubtful, the risk of irreparable harm if the funds were paid out justified an interim interdict. He said the balance of convenience favoured all beneficiaries of Mabuza’s estate, not only one.
Alexforbes said it remained committed to transparency while respecting ongoing legal processes.
“We remain committed to engaging transparently, upholding the law as it stands and providing certainty to our clients and their families during what is often a difficult and sensitive time,” said Kalamaras.
For now, Mnisi cannot touch the R44.7-million until the main court application—which will also test the validity of her posthumous marriage certificate—is heard.
